AF Blakemore is encouraging independents to spend large sums on refurbishments despite the gloomy economic conditions.

The wholesaler, which supplies 700 Spar stores in the Midlands and parts of Wales, has offered to underwrite investments made in refitting stores at a time when many businesses might be tempted to rein in spending.

Under the terms of the Guaranteed Investment Scheme, AF Blakemore, which also owns the 213-strong Tates chain, will repay the money spent upgrading the store and the interest it accrues if it is not paid for by an increase in profits within five years.

The scheme was a way of encouraging people to invest at a time of financial uncertainty, Dennis Evans, managing director of AF Blakemore Distribution, told The Grocer.

" We want to encourage people to have nice modern stores. At a time when costs are going up, we're bucking the trend and making this process easier," he said. "I'm hoping lots of Spar stores will be refitted. I have been quite encouraged by the number of retailers who want to talk to me about it."

As part of the deal, which was announced at the Spar Retail Show 2008, retailers can only invest a sum agreed by AF Blakemore.

The supplier also opened a 29,000ft sq recycling and waste centre this month at a cost of £600,000.

The facility at the company's Willenhall site in the West Midlands collects paper and plastic from the Spar stores to which it delivers. It is hoped that the plant will eventually process all the shops' waste.

"We are facing more consumer pressure to be green," said AF Blakemore's managing director Peter Blakemore. "We must make sure we gain competitive advantage by becoming more responsible retailers."

Blakemore has also introduced a raft of environmentally friendly measures, such as upgrading the fleet to more economical vehicles and training its drivers to use less fuel.